Mexican energy sector’s nervous wait for new president to take office

After Andres Manuel Lopez Obrador won Mexico’s presidential elections on July 2, industry participants and investors have been wondering what the future holds for the energy sector in Mexico. It is still unclear what the position of Lopez Obrador — known widely as AMLO — will be when once he takes office on December 1, as his campaign was marked by contradictions. He has long supported a nationalistic outlook on energy and has spent years criticizing Mexico’s reforms in opening up its energy markets to the private sector, liberalizing energy prices and ending the decades-long monopoly of Pemex. During his campaign, AMLO left the door open to making changes. Election results gave AMLO’s political coalition a majority in both the Congress and the Senate, but estimates indicate this will not exceed the two-thirds threshold needed to change the constitution. Nevertheless, the results give AMLO a strong mandate for implementing his policy agenda and could make it easier for him to obtain the votes he lacks to change the current laws, a scenario that almost no one had envisioned. Industry analysts believe AMLO will not halt the reforms; however, he could slow down the pace of new auctions and farmouts. Mexico’s… continue reading